The Parramatta office market is expected to struggle to keep up with demand due to an influx of white collar workers and undersupply in the area.
With one in 10 Australians already living in Western Sydney – the country’s 3rd largest region in terms of contribution to GDP – and one million more expected by 2031, the region is poised to become one of our great urban areas over the next few decades.
Deloitte's 2015 report, Designing Western Sydney, outlined the need to create 200,000 new jobs in the region by 2020, to address unsustainable worker transport challenges.
A large portion of demand for space is likely to come from the catalyst industries such as health, higher and international education, professional "white collar" services and cultural and creative industries.
Colliers' associate director of research Kristina Mastrullo said Parramatta would likely host the large majority of the expected additional 200,000 jobs created in Western Sydney by 2020.
“With the level of pre-commitment to be experienced, we expect the commercial core of Parramatta to expand through new development supply to accommodate these future workers," she said.
Up to 2,400 white collar workers have been added to the Parramatta office market within the last 12 months.
“As a result of government decentralisation, lack of new supply, and the displacement of tenants due to conversion to other uses, Parramatta’s total vacancy is now one of the lowest nationally,” Colliers' Alex Brown said.
With the vacancy rate in the first half of 2017 at 4.3 per cent, and A Grade vacancy remaining at zero percent, tenants have been faced with limited choice. This has resulted in landlords being able to achieve increased net effective rents throughout 2017.”